Trump’s tariff agenda is on trial at the Supreme Court, with arguments taking place today.

In today’s session, several judges questioned the arguments of Trump’s team, suggesting that broad and national security tariffs overstep the language of the law he used; one that cites the ‘regulation’ of foreign trade.

On that, North American automaker shares gained 3-4%. That sector is one under particularly high stakes for Canada in the tariff battle. Notably, the steel/aluminum tariffs that have been the subject of recent negotiations are not under review. Those come under a separate section of law called Section 232 that’s not disputed.

The inability of Trump to place tariffs would put Canada (and Mexico) in much better positions as they aim to renegotiate the USMCA agreement next summer.

A Supreme Court decision could come as soon as January but it could take up to six months.

USD/CAD had risen earlier but retreated during the arguments and is close to flat. It’s also been lifted by positive risk sentiment today with the S&P 500 up 1%. On the chart, a finish near these levels would carve out a spinning top candlestick that might indicate a short-term top.